Gas Prices!!!!!!!!!!! (moving, eat, oil)

[Glenfield]

Originally Posted by xandrex

The government doesn't set the price at the pump. Any changes in policy have been largely superfluous.

Why exactly is it the government's job to lower gas prices for people, but anything else they do is distorting the market is some horrible way?

There is a method to keeping your gas prices down: Have a fuel-efficient vehicle and drive fewer miles. I don't like paying the price more than anyone else. I'd love cheap gas...I just don't see it as a god-given right.

I am, of course, well aware that the government does not set fuel prices, that there is no "right" to fuel at a certain cost, and that it is not the government's job to lower fuel prices. However, I disagree that government policy has been superfluous as far as energy prices go.

Through misguided and excessive regulation of refineries, dictating a specific winter and summer blend of gasoline, preventing exploration and drilling, excessive taxation, and blocking a pipeline to bring in Canadian crude, the government has artificially constrained the supply of crude oil and fosil fuel alternatives, which has led to higher fuel prices than we would have without those restrictions. I would prefer to see the free market set capacity and price, but the government has interfered with supply in order to drive prices higher in hopes of encouraging some conservation. If fact, that has been a stated policy aim of the administration. And we can all see that this policy has been quite effective in terms of price.

Now it's commonplace wisdom to hear that we should all drive little shoeboxes that get 50 miles to the gallon, and, as a city resident with a little car, I personally don't spend much on gasoline, so it's no skin off my nose at the fuel pump. But what about my farmer relative with multiple tractors with tanks that take hundreds of gallons to fill and run 24 hours a day during planting season? Last I heard, there was no Prius tractor.

We feel this directly in the price of food ( not to mention how the government has screwed up the food supply by mandating the use of ethanol or how most new exploration of natural gas and shale oil has been accomplished despite government interference) So while I agree that it's not government's job to lower to cost of fuel, they should get out of the business of artificially constraining the supply.

[dravogadro]

Originally Posted by Glenfield

Now it's commonplace wisdom to hear that we should all drive little shoeboxes that get 50 miles to the gallon, and, as a city resident with a little car, I personally don't spend much on gasoline, so it's no skin off my nose at the fuel pump. But what about my farmer relative with multiple tractors with tanks that take hundreds of gallons to fill and run 24 hours a day during planting season? Last I heard, there was no Prius tractor.

Hybrids are moving into the large vehicle market in a big way. I'm pretty sure a few companies at least have hybrid tractor prototypes out.

[golfgal]

Then add in the semi's to haul food around the country....even if you don't drive or drive a fuel efficient car, these gas prices will hit you at the grocery store, Target or wherever. School districts and their fleets of buses will get hit hard too.

[Beenhere4ever]

Originally Posted by golfgal

Then add in the semi's to haul food around the country....even if you don't drive or drive a fuel efficient car, these gas prices will hit you at the grocery store, Target or wherever. School districts and their fleets of buses will get hit hard too.

Fine. But they won't hit me exclusively. They have the same indirect effect on everyone. Meanwhile, the direct impact will be minimized. And, again, if you don't want a centrally planned economy, you might as well learn to roll with the punches when market conditions allow producers to jack prices up. By the way, the American farmer is an example of an overuser. The "efficiency" of a big farm is partly mirage. Cheap energy allowed the practice to evolve, but like all other relics of the past, the energy market is starting to pinch. Now we see just how BAD losing all those manufacturing jobs with high value added will be. So long as people could buy cheap offshore goods without suffering the consequences, everyone thought it was just nifty. But people were downshifted to less and less pay for their work here. Now those shrunken incomes come face to face with high energy costs and offshoring begans to peel off its mask. And now, too late, people seem to want a miracle. But those offshore nations now have money and can drive up energy costs. It isn't like all of this was not foreseen. But so many thought they were just hearing alarmists sounding off.

[TimtheGuy]

Originally Posted by Beenhere4ever

Actually I don't think any of you understand the workings of the market. Unless you've studied the serious complexity of commodities trading, all the foregoing is hogwash. Read today's Wall Street Journal how oil market fundamentals are trending the OPPOSITE of the price of oil. Learn. Become educated. Even Alan Greenspan has admitted he no longer understands markets after the real estate crash.

Uh huh.

Why are there states in the U.S. right now where gas is $1/gal cheaper than it is here in MN?

[xandrex]

Originally Posted by Govie

Without question the most regressive and oppressive tax of any - by far.

The fact we aren't organizing marches in the streets regarding this crushing tax to the middle and lower classes is upsetting.

I mean, we have no choice; we are at the "market's" discretion.

The sooner we tap into our new-found goldmines (oil) in the Dakotas the sooner it will hopefully relieve some of the oppression.

Just sad that a few guys/companies at the top of the oil/gas market really are laughing at us and play us like a deck of cards.

Just because the price of gas is going up doesn't mean the government is raking in any more money. It's fixed per gallon. So this is not a "regressive and oppressive tax". It's a commodity that Americans (and the western world, really) are hopelessly addicted to, and therefore controlled by.

We are tapping into the North Dakota oil at a remarkable pace. But the funniest thing is that oil in places like that actually requires a high price on a barrel of oil. When prices drop, it becomes less profitable to be doing exploration and drilling in certain areas. North Dakota is a state that has faced an up-and-down market because of market fluctuations. They're booming right now, but at some point it may very well go bust (it did decades ago and left western ND devastated really until this latest boom).

Originally Posted by Timtheguy

They can (and do) put the kybash on new refineries, pipelines and drilling. The impose substantial taxes. They disrupt the refining process by requiring summer & winter blend. The MARKET says the price of gas should be down based on crude prices & future crude supply.

They also keep your gas cheap by not passing on the entire cost to you (see: military budget). They keep your gas cheap by have a ridiculously low federal tax per gallon. They keep your gas cheap by having a huge amount in reserve that they can threaten to release (and sometimes does actually release) in times of emergency or to flex muscle on prices.

Regulations for drilling, especially in water, took a hit because we had one of the worst oil spills in history. I am not sorry we have tougher regulations on businesses that are able to absolutely devastate any entire gulf and the enormous costs they put on gulf states.

Despite all that, we are producing just about more oil than we ever have, and within a few years we'll be the second largest oil provider, overtaking Russia, but only a little behind Saudi Arabia. I believe predictions have us surpassing them in the not-so-distant future as well.

Costs are high because oil is a global commodity. It doesn't matter if it's produced in Saudi Arabia, Canada, Russia, or the United States: It gets sold to the person who's offering to pay for it. A growing middle-class in China that is as car-happy as the United States is, a booming India, and the explosive growth of other countries is going to drive costs up. We can only hope we are still limiting our use of gas (consumption and vehicle miles traveled hit their peak in 2006 and have been declining since).

[TimtheGuy]

Originally Posted by xandrex

Costs are high because oil is a global commodity. It doesn't matter if it's produced in Saudi Arabia, Canada, Russia, or the United States: It gets sold to the person who's offering to pay for it. A growing middle-class in China that is as car-happy as the United States is, a booming India, and the explosive growth of other countries is going to drive costs up. We can only hope we are still limiting our use of gas (consumption and vehicle miles traveled hit their peak in 2006 and have been declining since).

So again, why is is $1/gal. higher in MN right now than other places?

[xandrex]

Originally Posted by TimtheGuy

So again, why is is $1/gal. higher in MN right now than other places?

Because gas prices fluctuate in regions. Our combined federal and state gas taxes in Minnesota are below the national average.

Just about every news outlet wrote about gas prices, so the information on why prices are high is online. Among reasons listed in this article:

• Low spring inventories in the Midwest (which is typical)
• Refineries that needed to maintenance in the area, which requires diverting gas to us (which raises the price)
• A refinery removing some production
• An unexpected shut-down at a refinery

I'm confused by what you thought the reasoning was. It certainly wasn't the big, bad government jacking up prices.

[TimtheGuy]

Originally Posted by xandrex

Because gas prices fluctuate in regions. Our combined federal and state gas taxes in Minnesota are below the national average.

Just about every news outlet wrote about gas prices, so the information on why prices are high is online. Among reasons listed in this article:

• Low spring inventories in the Midwest (which is typical)
• Refineries that needed to maintenance in the area, which requires diverting gas to us (which raises the price)
• A refinery removing some production
• An unexpected shut-down at a refinery

I'm confused by what you thought the reasoning was. It certainly wasn't the big, bad government jacking up prices.

Correct...it's the lack of refining capacity! (the tax diff is only like 10cents) Why aren't we building any new refineries? GOV'T.

Aren't we leaving ourselves extremely vulnerable economically when little glitches in refining can result in large cost swings? What would happen to our currently 'fragile' economy if gas shot to $6/gal due to a few refineries going down?

[xandrex]

Originally Posted by TimtheGuy

Correct...it's the lack of refining capacity! (the tax diff is only like 10cents) Why aren't we building any new refineries? GOV'T.

Aren't we leaving ourselves extremely vulnerable economically when little glitches in refining can result in large cost swings? What would happen to our currently 'fragile' economy if gas shot to $6/gal due to a few refineries going down?

Consumption of gas in the United States is declining. Other than replacement, we likely don't need much more actual capacity (I'm open to the idea of more depending on factors, but my opinion doesn't really matter in that case). It will just lead to excess capacity in the future, which no business will want to have. It would just be an extra cost. When the refineries have gone down, we've been covered: we pay a bit more until the refinery is back up and then things go back to normal (refineries aren't free either...you'll pay for that in your gas as well).

The government wouldn't let gas jump to $6/gallon (but I'm sure we'll slowly hit that at some point). If prices were threatening to jump, they'd open the Strategic Petroleum Reserve.